Senate Bill Would Greenlight Natural Gas Exports to US Allies

A group of Senate Republicans and two centrist Democrats shook up political debates over U.S. natural gas exports Thursday with new legislation that would ensure federal approval of exports to NATO countries and Japan.

Sens. John Barrasso (R-Wyo.), Mark Begich (D-Alaska) and several colleagues floated the bill as the Energy Department (DOE) reviews 16 applicationsto export liquefied natural gas (LNG) to countries that don’t have free-trade deals with the U.S.

Federal law, according to DOE, generally requires approval of exports to nations that have such trade deals with the U.S., but other applications face much more scrutiny from regulators.

The “Expedited LNG for American Allies Act” would put NATO allies and Japan, which is seeking to expand importsas most of its nuclear capacity remains offline, on equal footing with the formal free-trade partners.

But the prospect of a major export expansion has generated opposition from some big U.S. manufacturing and chemical companies, who fear higher domestic prices, and has drawn pushback from some environmentalists as well.

A slew of oil-and-gas industry and business groups, however, are strongly backing the export plans. Barrasso called exports good for Wyoming, a natural gas-producing state, and the nation as a whole.

“This will expand economic opportunities across America and help lower our nation’s trade deficit. Our bill will also promote the energy security of key U.S. allies by helping reduce their dependence on oil and gas from countries, such as Russia and Iran,” he said in a statement about the new bill.

The bill expands on legislation floated late in 2012 by now-retired Sen. Dick Lugar (R-Ind.) that would provide automatic approval for exports to NATO countries.

In addition to Japan and NATO countries, the new Senate bill would also require DOE to approve exports to other countries if the State Department, in consultation with the Defense Department, determines that it would promote U.S. security interests.

With debates on exports heating up, many eyes are on new Senate Energy and Natural Resources Committee Chairman Ron Wyden (D-Ore.), who has expressed skepticism about a major expansion.

He has said that Congress should step in to help ensure that regulators find the “sweet spot” on the level of exports allowed. Wyden’s office did not provide immediate comment on Barrasso’s new bill.

Begich, in supporting the bill, highlighted Japan’s push to import more gas.

“In addition to being a key strategic ally for our nation, Japan has been Alaska’s number one trading partner for decades. When I talk to members of the Japanese parliament or officials from Japanese utilities, concern for the security of their natural gas supply always comes up. The U.S. and Alaska have plenty of natural gas to sell to Japan and our NATO allies, and I can’t think of a better place to sell it than to our strategic and economic partners,” Begich said in a statement.

Japan is already the world’s largest LNG importer, and the 2011 nuclear disaster has further increased its need for outside energy supplies.

Almost all of Japan’s nuclear plants remain offline in the wake of the March 2011 earthquake and tsunami, which led to meltdowns at the Fukushima Daiichi plant.